TTIP implicated in backroom deals

May 26, 2014

7 Min Read

A Former politics editor looks at the shady activities of the Transatlantic Trade and Investment Partnership.

At time of writing, the European Parliament elections had not yet taken place, but by now the UK will presumably have elected its 73 shiny new MEPs (some of these may just be polished up older models) and the political parties and their candidates will be picking over the rubble of their campaigns, already thinking of new strategies for next year’s general election. But what about the parliament to which we have just elected our representatives?

The paradox of European politics is that as the powers and significance of the elected body have increased, turnout in these elections has fallen. The EP may be more powerful than it has ever been, but still remains in the long shadow left by the European Commission, a much more influential body which remains appointed by governments rather than elected.

There is a powerful demonstration of the Commission’s dominance over all other European institutions being played out behind the heat of the elections: secret negotiations with the USA over a proposed transatlantic free trade area which would cover the two largest economic blocs in the world have continued, albeit to total indifference by most party campaigns. The Commission has insisted that these discussions proceed in private so as to ensure the best possible outcome, and many politicians, including those from the mainstream UK parties seem only too willing to collaborate on maintaining this silence.

Since July 2013, the EU Trade Commissioner Karel De Gucht has been leading a team in negotiations with the US Trade Representative, as part of a so-called ‘High Level Working Group on Jobs and Growth’, but the details of what is being discussed, and who has been invited to take part in the discussions remain decidedly hazy. De Gucht has suggested that “a certain level of confidentiality is needed in the negotiations for the EU to succeed and reach its objectives”, however this appeared unconvincing to critics of the deal who suspected that the lack of transparency is simply to allow corporate lobbyists to participate in the process whilst denying democratic scrutiny.

Criticisms of the deal were inflamed by the leaking of a draft treaty in March 2014 in which the general principles of the Transatlantic Trade and Investment Partnership (TTIP) were set out. Of course the free trade area requires the removal of tariffs and economic barriers to trade, but since the US and EU member states have been long-standing members of the World Trade Organisation, the burden of tariffs is already fairly minimal. Instead the deal will work on removing technical barriers to trade, and that includes legislation by national and, indeed, devolved governments, which could impact on the success of trade within the free trade area.

The possibility of the finalised TTIP including provisions for a legal instrument known as an Investor-State Dispute Settlement has particularly worried stakeholders across the public and private sectors. As such, the instrument could mean handing transnational corporations the legal recourse to challenge governments over policies they claim are harming trade profits. An independent tribunal could be created with the power to overturn decisions reached by elected parliaments. This should be of deep concern to democrats in all parties, and the Commission should come under considerable pressure to offer substantial assurances that the will of the people can not be overridden by the will of industry.

This is not just paranoid thinking; ISDS mechanisms have been included in similar treaties including the North American Free Trade Agreement, and have led to a number of high profile challenges to legitimate public policy. In 2011 tobacco giant Philip Morris launched a legal challenge to the Australian Government over plain cigarette packaging; having won a legal challenge in 2009 over environmental requirements for coal power stations, Swedish energy company Vattenfall are now once again hoping to overturn the German Government’s policy to phase out nuclear power by 2020. In the EU, many are worried that hard-won European legislation to ban the sale of chlorine-washed chicken and hormone-treated beef in the single market could be overturned by a US industry which has no such restrictions. Perhaps having begun down the path towards privatisation, this measure could force the NHS into full-blown competition in the new transatlantic single market.

So why has there been so little coverage of this historic treaty? This Free Trade agreement will directly affect 1.3 billion people, changing the way they work, consume, and do business, and yet the national media has paid almost no attention to this important issue.

The relevant Whitehall department, Business, Innovation and Skills, is overwhelmingly positive about the deal, issuing a series of press releases proclaiming the unambiguously positive effects it will have on jobs and economic growth. But unless they know something we don’t (admittedly highly possible) they are not even present in negotiations, so are equally in the dark as to which non-tariff barriers to trade are insurmountable, and which can be kept in place. We do not yet know the full impact, and the Conservatives and Liberal Democrats in government should be cautious before throwing their full unquestioning weight behind the Commission.

There has been a little interest in the subject in Westminster; Labour MP John Healey led a group of politicians in establishing an All-Party Parliamentary Group on ‘European Union-United States Trade and Investment’, to look into the issue, and were able to secure a back bench debate in the commons on the 18th July 2013, but more focus needs to be put on the developing story, and that requires pressure from elected representatives and governments at all levels to demand transparency, and insist that the European Commission, and the EU more broadly, does not forget that it must stand up for the interests of people before those of corporate lobbyists.

Although it may not look like it, this is also a very important issue for Wales; BIS predicts a benefit of £1,500m to the Welsh economy, particularly in the energy and manufacturing sectors which will benefit from increased investment and access to American markets. Of course that is not the only story: a quarter of Welsh workers are employed in the public sector, of which two-thirds are women. Were the TTIP to demand that the public sector be more thoroughly integrated into the single market, thousands of jobs and services could be put at risk. Wales is in a fortunate situation to have a devolved government in Cardiff; it must use this additional political clout to demand proper scrutiny of this deal before it is finalised.

This is far too important an issue to be ignored or left to narrow politicking; the Government in Westminster have been far too complacent in accepting the most optimistic claims of the deals proponents without question. Neither is this the time for lazy Euro scepticism; the newly elected European Parliament must lead the call for the Commission to open up about the trade deal, and they must do so with the support of national and regional elected representatives of the people. Only by working together can we ensure any future trade agreement between the EU and the USA has the interests of the people at its heart.